Mitt Romney's energy plan: What does it promise?

Mitt Romney on Thursday unveiled a plan to make the US an "energy superpower" and achieve North American "energy independence by 2020." It would happen, the plan says, largely by curbing environmental restrictions and handing off to states traditional federal responsibility for overseeing oil and gas drilling on federal lands.

In addition to achieving energy security and shrinking trade deficits, the plan claims it would also produce 3 million new jobs and a $500 billion boost to the economy with "lower energy prices for job creators and middle-class families." All told, about $1 trillion in royalties would flow to federal, state, and local governments, the plan states.

But critics say the economic benefits are based on policy calculations that have been out of date for decades and note that while the word "oil" is mentioned 154 times, "climate" is not mentioned once. 

Seeking to distinguish himself from President Obama, Mr. Romney set out several main goals for this plan:

• It would cut federal permitting hurdles, contending that shift would vastly boost US oil and gas exploration both onshore and off. Nuclear energy would get fast-tracked reactor designs.

• Coal production would get a boost from revision of the landmark Clean Air Act that would eliminate greenhouse-gas emissions restrictions. Although not mentioned explicitly in the plan document, the law would be modified "to exclude carbon dioxide from its purview," the Romney website's energy section says.

• Offshore leasing would "aggressively" open new zones off the coasts of Virginia and the Carolinas to start – and then expand. The Keystone XL pipeline would be approved. A regional pact to accelerate cross-border energy investments and infrastructure would be signed. More federal research dollars would go to new energy technologies, less to tax incentives.

• Wind, solar, and other renewable energy sources are mentioned briefly and would ostensibly get fast permits, too, but lose their tax credits, advocates say. The Renewable Fuels Standard that mandates increasing quantities of biofuels would be kept, not tossed.

“We have an unprecedented opportunity to make our natural resources a long-term source of competitive advantage for our nation," Romney says in a statement in the plan. "If we develop these resources to the fullest, we will not only guarantee ourselves an affordable and reliable supply of energy, but also enjoy benefits throughout our economy.”

But even if Romney's plan were to dramatically increase US oil production, US energy-security experts say it would do little to lower domestic oil prices, which are set by a global oil market controlled by the Organization for Petroleum Exporting Countries (OPEC).

"Romney makes the same mistake nine previous presidents committed," says Gal Luft, a senior adviser to the United States Energy Security Council, an energy security think tank. "He assumes import reductions will translate into lower oil prices. This paradigm has collapsed. In the past seven years US oil imports dropped from 60 percent of consumption to 42 percent. Yet, over the same period the price of oil doubled and so did the burden of oil imports on the economy. The only thing that can bring down prices is fuel competition and cars that allow it."

Energy-security hawks favor vehicles that can plug in and can run on domestically produced electricity generated from coal, natural gas, wind, and solar power. 

"There's some good elements in this plan related to jobs and balance of payments improvements," says R. James Woolsey, former energy adviser to John McCain during his presidential run and former director of the Central Intelligence Agency says. But "they could have curbed OPEC's power simply by requiring vehicles to be able to use more than one fuel."

Others similarly expressed reservations about the plan's claim of energy independence.

"This plan is all about increasing supply and not about reducing demand by eliminating energy waste and by shifting to more abundant fuels," says Reid Detchon, executive director of the Energy Future Coalition, a broad-based non-partisan public policy. 

Oil companies were enthusiastic about the plan. 

“The Romney plan demonstrates a very clear understanding of how America’s oil and natural gas companies, like mine, work," said Virginia “Gigi” Lazenby, chairman of the Independent Petroleum Association of America in a statement. "States, not bureaucrats from Washington, best know how to protect the environment while allowing for responsible American energy production." 

Environmentalists were quick to lash out at the plan.

The Romney-Ryan plan is an “oil above all” energy strategy that ignores current drought conditions and the impact of fossil fuels in accelerating climate change, writes Daniel Weiss, director of Climate Strategy at the Center for American Progress Action Fund, a left-leaning think tank, in a recent blog.

He also questions the plan's economic figures. 

"The Romney-Ryan plan once again claims mysterious 'trillions' of dollars in government revenue," Weiss wrote. "However, a recent Congressional Budget Office analysis found that their proposals would bring in only limited federal revenues over the next decade. Instead, the Romney-Ryan energy plan includes billions of dollars of tax breaks to corporate polluter allies, access to lands and waters owned by all Americans, and fewer restrictions on mercury, toxic, and carbon pollution."

Some elements of the plan might be hard to get through Congress. It would also allow weaker state regulatory processes and permitting to hold sway on millions of acres of federal lands, excluding only National Parks and a few other now-restricted areas. With the US Senate split on the issue, "this one could prove the hardest to execute," writes Kevin Book, an energy market researcher with ClearView Energy Partners, a Washington-based energy market research firm.

Oil production is already at an eight-year high, while oil imports fell from an all-time high of 13.5 million barrels per day (65 percent of demand) in 2005 to 9.8 million barrels per day (52 percent of demand) last year. A weak economy is responsible for much of the drop in demand. But fuel efficiency also plays a role, and the Obama administration is expected to announce soon a set of mandates for a 54.5 miles per gallon fleet average by 2025, further diminishing fuel consumption.

"We're much more energy independent as a country now than we were under the last Republican administration, and we've seen exponential growth in the clean-energy sector," says Joshua Freed, vice president for clean energy at Third Way, a nonpartisan Washington think tank. "So it's very disappointing that the Romney document seems to ignore or is unaware of that growth."